Antillean Media Group

Antigua furious over ‘treasonous’ plans for LIAT and Barbados

ST. JOHN’S, Antigua, March 30, 2015 (AMG) — The Government of Antigua and Barbuda is furious over a leaked document which detailed plans for Barbados to divest its majority share in regional-airline LIAT, and to take several aircraft from its fleet to form a new airline.

In several strongly-worded statements over the past few days, Prime Minister Gaston Browne described the plans as “treason”, and stated that he will demand the resignation of LIAT CEO, David Evans, if it was found that he played a role in the creation of the plan.

AMG understands that the document was first discussed at a meeting of the LIAT Board of Directors, from where it was allegedly leaked to Browne.

A new Barbados airline: Sources confirm that the plan in question proposes that Barbados should take several of LIAT’s new ATR aircraft and form a new company, code-named “Newco”, to compete with LIAT.

The new company would then replace several LIAT routes, and develop new intra-regional routes not currently serviced by LIAT.

The plan further detailed the strategy by which Barbados would acquire several of LIAT’s new ATR aircraft, either through a shareholder decision or through a reassignment of title by the Caribbean Development Bank, which funded the purchase of the new fleet.

It remains unclear whether Barbados played a role in the creation of the document, or whether it was privy to the details of the plans.

But in statements made over the weekend, Browne appeared to ascribe culpability to Bridgetown, telling state-owned ABS Television that Barbados was “literally seeking to collapse LIAT”, and that any such moves would run “contrary to the spirit of Caribbean integration.”

Barbados co-owns LIAT with the minority shareholder governments of St. Vincent, Antigua and Dominica, and highly-placed sources tell AMG that OECS Aviation Ministers are considering a denial of overflight rights for any eventual successor to LIAT that emanated from the current plans.

The contentious issue has the potential to sour relations within the Caribbean Community bloc, with Browne going on record to decry the plan as an “extremist plot” to promote national agendas.

Antigua’s national agenda: LIAT’s importance to Antigua, and Prime Minister Browne’s strong objections to the proposed restructuring of the Antigua-based airline, have been fuelling intense debate since a February shareholders’ meeting in Barbados.

At that time, shareholders agreed that the airline’s flight base should be moved to Barbados, and that 180 staff should be severed as a means to cut the cash-strapped airline’s perennial losses.

But Brown again protested against these decisions and requested a hold on their implementation, citing negative social and economic impacts for Antigua.

“They are literally pulling, and have pulled to some extent, the rug from under our feet over the years, and we are looking to resist any such further move,” Browne said of the shareholders’ decision.

“We buy flour from St Vincent, we buy juices from Barbados, vegetables from Dominica and all I am saying to them, leave us with LIAT,” the Prime Minister said. “We have every right to defend what’s in the best interest of Antigua and Barbuda.”

LIAT’s economic woes: Despite the centricity of Antigua-headquartered LIAT to the local economy, its financial situation is dire. Maintenance costs for its former fleet and hefty salary obligations contribute to the airline’s perennial losses.

Prime Minister Browne has blamed the LIAT Board, and regional governments, for failing to turn the airline’s economic fortunes around.

Browne said that the Board should take responsibility for its “failure to make LIAT a profitable enterprise”, citing an assurance by CEO David Evans that the airline would turn a profit by 2015.

The Prime Minister has also gone on record to advocate the abolition of regional travel tax – which makes up the bulk of LIAT fares – and the removal of LIAT landing fees, none of which have found appetite among regional governments.

Browne also took a swipe at other shareholder governments, telling a local radio station that there needed to be a change even at the level of LIAT’s political directorate. “I don’t see why one Prime Minister should control the chairmanship of LIAT, it should be rotated”, the Prime Minister said.

“Even in terms of the share holding positions of the various governments, I believe the shares of Barbados should be diluted because they believe that because they have the majority shares, that everything must move to Barbados.”

Barbados’ Minister of Tourism, Richard Sealy, has gone on record to rally for more of the airline’s operations to be based on the island to realise the benefits of taxpayers’ investment. The island already is the top-performing destination in revenue and passenger indicators, and the Barbados – St. Vincent route is reportedly among the airline’s most profitable.

Antigua furious over ‘treasonous’ plans for LIAT and Barbados

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